BMA plans to force life re/insurers to share more detail of investments

The Bermuda Monetary Authority is planning to force Bermuda-based life re/insurers to share more details of their investments, The Financial Times has reported.  

The fast-growing life re/insurance sector has more than $1 trillion in assets backing annuities and other long-term savings products. 

The FT said global policymakers and regulators are increasingly bearing down on the liquidity, counterparty and other risks being built up through offshore deals. 

In a statement to the FT, the BMA said it had published a series of reports since the end of last year on areas such as liquidity risk and private equity-linked insurers to “help the public understand the evolution of the business models and further encourage market discipline”. 

It added that it was planning to “augment this work by requiring commercial life and annuity insurers to publish more details regarding their investment portfolios on an annual basis to further deepen understanding”. 

The consultation would start in the “near future”, the regulator said.

 Currently, Bermudian insurers publish documents such as financial statements and the proposals would provide more granular detail on the investments, likely including those affiliated to insurers’ owners or linked parties, according to a person familiar with the matter, the FT said. 

The crisis surrounding one Bermudian reinsurer owned by a private equity firm, 777 Re, has underscored the concerns of regulators about the risks embedded in offshore reinsurers’ investment strategies.  

777 Re was plunged into crisis after taking on significant exposure to assets connected to Josh Wander’s eponymous Miami-based investment firm, from football clubs to budget airlines. US insurers that had ceded billions of dollars in assets to the group were caught up in the fallout. 

The regulator has since stepped up its scrutiny of affiliated and related-party assets through data collection, and on-site examinations. 

Suzanne Williams-Charles, the chief executive of BILTIR, which represents Bermuda’s long-term insurers and reinsurers, said it was “supportive of proposals for increased public transparency”, adding that some of that which could be made public was already reported to the regulator.  

Bermudian insurers are “committed to serving the needs of their customers which includes ensuring that policyholders and other stakeholders are both informed and able to make appropriate choices”, she added. 

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